Objectives, Strategies, Performance Measures and Targets — Continued

Core Business Area 5 — Risk Management

Context: Agriculture faces many risks including unpredictable weather, diseases and markets. All of these risks can cause unstable incomes, and often have caused very significant losses. The objective of risk management programs is to stabilize these fluctuations and allow farmers to continue operating through downturns and remain competitive. We are fostering a shared risk management approach that includes improved risk management by farmers themselves.

Governments in many other provinces and jurisdictions world-wide provide greater levels of income support to farmers, thus adversely affecting the competitive position of British Columbia farmers. British Columbia’s trade policy objective is the elimination of all trade and production distorting subsidies to establish a level competitive playing field for the province’s agri-food industry.

British Columbia is negotiating with the federal government regarding the delivery of a new long-term agriculture policy (Agriculture Policy Framework — APF) that deals with food safety, risk management, environmental sustainability, renewal and science/innovation. The program is a 60/40 federal/provincial cost shared initiative. The current federal/provincial agreement on agriculture risk management expires March 31, 2003 and a replacement agreement will be needed before that date to ensure continued federal funding to BC.

The federal government has dramatically increased its level of financial commitment nationally for APF. This expansion puts pressure on the British Columbia government to increase its investment in eligible programs to attract the expanded federal dollars to BC. The ministry is also concerned that national program design changes and desire to increase participation levels could increase costs to each province. BC’s objective is to limit provincial government exposure to increased program costs. The ministry is looking to maximize its share of federal funds without requiring additional provincial expenditures.

Regulated marketing is considered to be an effective risk management tool in stabilizing incomes for specific sectors of the agriculture industry. British Columbia has confirmed support for national supply management on the basis of economic benefits to the province in the absence of trade reform at this time. BC will be implementing changes to the regulated marketing system over the next 3 years to reflect directions of the British Columbia government’s core review process. British Columbia sees opportunities for growth in national allocation of supply managed commodities (dairy, poultry and eggs).

Goal: Stable farm incomes for British Columbia farmers.

Outcome: Stable farm incomes through programs that effectively minimize the impact of unpredictable, uncontrollable risks, while maintaining a reasonably level playing field for BC farmers.

Measure	2002/03 Base	2003/04 Target	2004/05 Target	2005/06 Target
Stable farm incomes as measured by annual deviation from 5-year rolling average	Farm cash receipts $2.2 billion (2001)	Reduced annual deviation from 5-year rolling average [under development]	Reduced annual deviation from 5-year rolling average [under development]	Under development

Objective 1: A system of basic protection for farmers from uncontrollable and unpredictable disasters such as weather hazards, natural disasters, disease, pests and erratic markets consistent with trade obligations

Measure	2002/03 Base	2003/04 Target	2004/05 Target	2005/06 Target
Levels of participation in risk management programs — as measured by % of value of insurable crops covered by insurance	30% – 70% (varies by crop) of value of insurable crops covered	Progress toward 2005/06 target	Progress toward 2005/06 target	70% of the value of all insurable crops covered by insurance

Strategies

1. Maximize federal funding offered to BC farmers through negotiations on the federal/provincial Agricultural Policy Framework (APF) so that the combined federal/provincial investment provides a fair and effective level of support for risk management.
2. Engage the private sector through partnerships or improved linkages to increase the range of risk management tools available to farmers in British Columbia.
3. Make adjustments to Whole Farm Insurance Program (WFIP), Net Income Stabilization Account (NISA), and Crop Insurance (CI) in order to meet reduced budget targets over 3 years.

Objective 2: A policy framework for marketing boards that increases BC’s share of national allocations, provides better governance, improves market responsiveness, and encourages specialty products and further processing in BC over a three-year period.

Measure	2002/03 Base	2003/04 Target	2004/05 Target	2005/06 Target
BC’s share of Canadian sales of supply-managed commodities compared to BC’s % of Canadian population (13.2%), or as greater market demand dictates.	Milk — 8.8% Chicken — 15.1% Turkey — 10.6% Eggs — 12.9% Broiler egg — 16.2%	Gradual increase toward 2005/06 targets	Gradual increase toward 2005/06 targets	Milk — 10% Chicken — 15.1% Turkey — 13.2% Eggs — 13.2% Broiler egg — 16.2%

Strategy

1. Implement the recommendations of the regulated marketing review completed in 2002/03.

Core Business Area		2002/03 Restated Estimates	2003/04 Estimates	2004/05 Plan	2005/06 Plan
Operating Expenses ($000)
Operating Expenses		20,481	16,349	12,502	12,502
Full-time Equivalents (FTE)
FTEs		43.5	43.0	34.5	34.5
Ministry Capital Expenditures (Consolidated Revenue Fund) $000
Capital Expenditures		179	366	171	205
Other Financing Transactions ($000)
Crop Insurance Stabilization
	Receipts	3,000	3,000	3,000	3,000
	Disbursements	3,000	3,000	3,000	3,000
	Net cash source (requirement)	0	0	0	0

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Core Business Area 1 — Industry Competitiveness
Core Business Area 2 — Fisheries and Aquaculture Management
Core Business Area 3 — Food Safety and Quality
Core Business Area 4 — Environmental Sustainability and Resource Development
Core Business Area 5 — Risk Management
Core Business Area 6 — Executive and Support Services